EX-99.2 3 g14537exv99w2.htm EX-99.2 FINANCIAL TABLES ACCOMPANYING EXHIBIT 99.1 EX-99.2 FINANCIAL TABLES ACCOMPNAYING EXHIBIT 99.1
Exhibit 99.2
HLTH CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data, unaudited)
                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2008     2007     2008     2007  
Revenue
  $ 89,136     $ 77,197     $ 170,818     $ 149,078  
 
                               
Costs and expenses:
                               
Cost of operations
    32,763       28,997       64,333       57,615  
Sales and marketing
    25,460       21,929       51,290       44,799  
General and administrative
    23,181       26,950       44,325       55,393  
Depreciation and amortization
    7,315       7,239       14,203       13,564  
Interest income
    8,062       10,100       19,998       19,774  
Interest expense
    4,628       4,616       9,235       9,325  
Gain on sale of EBS Master LLC
                538,024        
Impairment of auction rate securities
                60,108        
Other (expense) income, net
    (666 )     1,396       (4,810 )     4,278  
 
                       
Income (loss) from continuing operations before income tax provision
    3,185       (1,038 )     480,536       (7,566 )
Income tax provision
    1,330       1,658       26,944       1,427  
Minority interest in WHC income (loss)
    1,071       843       (2,774 )     958  
Equity in earnings of EBS Master LLC
          7,575       4,007       14,674  
 
                       
Income from continuing operations
    784       4,036       460,373       4,723  
Loss from discontinued operations, net of tax
    (3,651 )     (49,499 )     (82 )     (44,484 )
 
                       
Net (loss) income
  $ (2,867 )   $ (45,463 )   $ 460,291     $ (39,761 )
 
                       
 
                               
Basic (loss) income per common share:
                               
Income from continuing operations
  $ 0.00     $ 0.02     $ 2.52     $ 0.03  
Loss from discontinued operations
    (0.02 )     (0.27 )     (0.00 )     (0.25 )
 
                       
Net (loss) income
  $ (0.02 )   $ (0.25 )   $ 2.52     $ (0.22 )
 
                       
 
                               
Diluted (loss) income per common share:
                               
Income from continuing operations
  $ 0.00     $ 0.02     $ 2.04     $ 0.02  
Loss from discontinued operations
    (0.02 )     (0.26 )     (0.00 )     (0.23 )
 
                       
Net (loss) income
  $ (0.02 )   $ (0.24 )   $ 2.04     $ (0.21 )
 
                       
 
                               
Weighted-average shares outstanding used in computing (loss) income per common share:
                               
Basic
    182,622       180,219       182,399       178,115  
 
                       
Diluted
    186,243       191,032       228,209       188,693  
 
                       

 


 

HLTH CORPORATION
CONSOLIDATED SEGMENT INFORMATION
(In thousands, except per share data, unaudited)
                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2008     2007     2008     2007  
Revenue
                               
WebMD Online Services:
                               
Advertising and sponsorship
  $ 62,383     $ 52,436     $ 118,448     $ 99,857  
Licensing
    21,866       19,799       43,789       39,914  
Content syndication and other
    345       653       762       1,537  
 
                       
Total WebMD Online Services
    84,594       72,888       162,999       141,308  
WebMD Publishing and Other Services
    4,582       4,382       7,859       7,906  
Inter-segment eliminations
    (40 )     (73 )     (40 )     (136 )
 
                       
 
  $ 89,136     $ 77,197     $ 170,818     $ 149,078  
 
                       
Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) (a)
                               
WebMD Online Services
  $ 18,800     $ 14,042     $ 35,331     $ 27,034  
WebMD Publishing and Other Services
    1,027       863       273       505  
Corporate
    (5,573 )     (6,337 )     (10,632 )     (13,063 )
 
                       
 
  $ 14,254     $ 8,568     $ 24,972     $ 14,476  
 
Adjusted EBITDA per diluted common share (b)
  $ 0.08     $ 0.04     $ 0.11     $ 0.08  
 
                       
 
                               
Interest, taxes, non-cash and other items (c)
                               
Interest income
  $ 8,062     $ 10,100     $ 19,998     $ 19,774  
Interest expense
    (4,628 )     (4,616 )     (9,235 )     (9,325 )
Income tax provision
    (1,330 )     (1,658 )     (26,944 )     (1,427 )
Depreciation and amortization
    (7,315 )     (7,239 )     (14,203 )     (13,564 )
Non-cash stock-based compensation
    (6,471 )     (7,779 )     (12,443 )     (16,961 )
Non-cash advertising
                (1,558 )     (2,320 )
Minority interest in WHC (income) loss
    (1,071 )     (843 )     2,774       (958 )
Equity in earnings of EBS Master LLC
          7,575       4,007       14,674  
Gain on sale of EBS Master LLC
                538,024        
Impairment of auction rate securities
                (60,108 )      
Other (expense) income, net
    (717 )     (72 )     (4,911 )     354  
 
                       
Income from continuing operations
    784       4,036       460,373       4,723  
Loss from discontinued operations, net of tax
    (3,651 )     (49,499 )     (82 )     (44,484 )
 
                       
Net (loss) income
  $ (2,867 )   $ (45,463 )   $ 460,291     $ (39,761 )
 
                       
 
                               
Basic (loss) income per common share:
                               
Income from continuing operations
  $ 0.00     $ 0.02     $ 2.52     $ 0.03  
Loss from discontinued operations
    (0.02 )     (0.27 )     (0.00 )     (0.25 )
 
                       
Net (loss) income
  $ (0.02 )   $ (0.25 )   $ 2.52     $ (0.22 )
 
                       
 
                               
Diluted (loss) income per common share:
                               
Income from continuing operations
  $ 0.00     $ 0.02     $ 2.04     $ 0.02  
Loss from discontinued operations
    (0.02 )     (0.26 )     (0.00 )     (0.23 )
 
                       
Net (loss) income
  $ (0.02 )   $ (0.24 )   $ 2.04     $ (0.21 )
 
                       
 
                               
Weighted-average shares outstanding used in computing (loss) income per common share:
                               
Basic
    182,622       180,219       182,399       178,115  
 
                       
Diluted
    186,243       191,032       228,209       188,693  
 
                       
 
(a)   See Annex A — Explanation of Non-GAAP Financial Measures.
 
(b)   Adjusted EBITDA per diluted common share is based on the weighted-average shares outstanding used in computing diluted (loss) income per common share.
 
(c)   Reconciliation of Adjusted EBITDA to income from continuing operations.

 


 

HLTH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
                 
    June 30, 2008     December 31, 2007  
Assets
               
Cash and cash equivalents
  $ 1,123,899     $ 536,879  
Short-term investments
    304,325       290,858  
Accounts receivable, net
    68,865       86,081  
Due from EBS Master LLC
    69       1,224  
Prepaid expenses and other current assets
    24,331       71,090  
Assets of discontinued operations
    268,046       262,964  
 
           
Total current assets
    1,789,535       1,249,096  
 
Marketable equity securities
    2,543       2,383  
Property and equipment, net
    48,491       49,554  
Goodwill
    214,475       217,323  
Intangible assets, net
    31,323       36,314  
Investment in EBS Master LLC
          25,261  
Other assets
    62,330       71,466  
 
           
Total Assets
  $ 2,148,697     $ 1,651,397  
 
           
 
               
Liabilities and Stockholders’ Equity
               
Accrued expenses
  $ 44,807     $ 49,598  
Deferred revenue
    87,401       76,401  
Liabilities of discontinued operations
    124,788       123,131  
 
           
Total current liabilities
    256,996       249,130  
 
Convertible notes
    650,000       650,000  
Other long-term liabilities
    21,332       21,137  
 
               
Minority interest in WHC
    135,416       131,353  
 
               
Stockholders’ equity
    1,084,953       599,777  
 
 
           
Total Liabilities and Stockholders’ Equity
  $ 2,148,697     $ 1,651,397  
 
           

 


 

HLTH CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
                 
    Six Months Ended  
    June 30,  
    2008     2007  
Cash flows from operating activities:
               
Net income (loss)
  $ 460,291     $ (39,761 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
               
Loss from discontinued operations, net of tax
    82       44,484  
Depreciation and amortization
    14,203       13,564  
Minority interest in WHC (income) loss
    (2,774 )     958  
Equity in earnings of EBS Master LLC
    (4,007 )     (14,674 )
Amortization of debt issuance costs
    1,490       1,447  
Non-cash advertising
    1,558       2,320  
Non-cash stock-based compensation
    12,443       16,961  
Deferred income taxes
    5,556       1,041  
Gain on sale of EBS Master LLC and 2006 EBS Sale
    (538,024 )     (399 )
Impairment of auction rate securities
    60,108        
Changes in operating assets and liabilities:
               
Accounts receivable
    17,216       7,976  
Prepaid expenses and other, net
    21,090       1,128  
Accrued expenses and other long-term liabilities
    (3,695 )     (44,070 )
Deferred revenue
    11,000       10,576  
 
           
Net cash provided by continuing operations
    56,537       1,551  
Net cash (used in) provided by discontinued operations
    (343 )     17,429  
 
           
Net cash provided by operating activities
    56,194       18,980  
 
               
Cash flows from investing activities:
               
Proceeds from maturities and sales of available-for-sale securities
    106,586       194,096  
Purchases of available-for-sale securities
    (177,150 )     (388,942 )
Purchases of property and equipment
    (6,985 )     (10,217 )
Proceeds related to the sales of EBS, EPS and ACS/ACP, net of expenses
    598,935       2,898  
Decreases in net advances to EBS Master LLC
    1,155       19,730  
Other
    148        
 
           
Net cash provided by (used in) continuing operations
    522,689       (182,435 )
Net cash used in discontinued operations
    (3,144 )     (2,341 )
 
           
Net cash provided by (used in ) investing activities
    519,545       (184,776 )
 
               
Cash flows from financing activities:
               
Proceeds from issuance of HLTH and WHC common stock
    9,644       103,263  
Purchases of treasury stock under repurchase program
          (42,906 )
Other
    (80 )     457  
 
           
Net cash provided by continuing operations
    9,564       60,814  
Net cash used in discontinued operations
    (76 )     (101 )
 
           
Net cash provided by financing activities
    9,488       60,713  
Effect of exchange rates on cash
    1,793       361  
 
           
Net increase (decrease) in cash and cash equivalents
    587,020       (104,722 )
Cash and cash equivalents at beginning of period
    536,879       614,691  
 
           
Cash and cash equivalents at end of period
  $ 1,123,899     $ 509,969